The Hindu Business Line : Reliance Energy board to meet on June 9 to consider buyback

RELIANCE Energy Ltd (REL) told the Bombay Stock Exchange on Monday that its board of directors will meet on June 9, 2004 to consider the buy back of its equity shares.

The company's shares along with those of other power sector companies, have plummeted in the last one month, since the new Union Government was formed. Power companies' shares have been taking a beating on the perception that power reforms will take a backseat under the United Progressive Alliance Government, with its leftist allies, say analysts.

``In such a situation, REL has no other option. The company has to assuage the confidence of its investors,'' said a senior analyst. The company's share prices have tumbled from Rs 739.70 per share on May 3to Rs 574.95 per share on May 18 and to Rs 486.05 per share on May 31.

Reliance Energy had allotted 1.3 crore share to Indian and foreign institutions and 92 lakh shares to Reliance Power Ventures Ltd on a preferential allotment basis, in March and April respectively this year, for Rs 640 per share. It had also allotted equity shares against the October-2002 Global Depository Receipts at the beginning of this month.

REL had raised $178 million (Rs 805 crore) in March through a five-year zero-coupon foreign currency convertible bond issue, translating into a conversion price of Rs 1007 per share at the end of five years.